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Wholesaling

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Dominique Stevens
  • Involved In Real Estate
  • Mill Valley, CA
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Wholesaling not allowed in California?

Dominique Stevens
  • Involved In Real Estate
  • Mill Valley, CA
Posted Sep 7 2013, 07:43

Good Morning!

I am a newbie investor and new to the Bigger Pockets community. What a wonderful site!

I have a real estate license and have been in real estate finance for several years, helping others to acquire real estate.

I now want to build my own portfolio of rental properties. I'm planning on starting by wholesaling some properties to build up capital.

Question: I was speaking to a colleague this week about my plan to acquire my first wholesale opportunity, and he told me that he'd found out, through a seminar, that in the state of California, the state frowns on wholesalers, and that if the state finds out that I've completed transactions via transferring title twice in the same day (to two separate entities), too many times, that they will consider me a "dealer" and that I will have to pay 35% tax on any real estate deals I conclude in the state for the rest of my life. I've never heard that technicality before.

Is there some California code preventing "dealing" or wholesaling in real estate that I'm not aware of? Maybe I should consult an attorney.

Thanks Bigger Pockets community..

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